New government regulations will monitor use of drones across Dubai. Chris Whiteoak / The National
New government regulations will monitor use of drones across Dubai. Chris Whiteoak / The National
New government regulations will monitor use of drones across Dubai. Chris Whiteoak / The National
New government regulations will monitor use of drones across Dubai. Chris Whiteoak / The National

Dubai paves way for drone package deliveries with 'miniature airports' network


Rory Reynolds
  • English
  • Arabic

Dubai took the first steps to creating a commercial drone network on Saturday as it set out plans for miniature helipads and an air traffic control system.

The Dubai Sky Dome project would pave the way for the delivery of packages and even the transport of passengers, the government said.

Sheikh Ahmed bin Saeed, president of Dubai Civil Aviation Authority, said an initial framework has been drawn up that includes laws and regulations.

The Dubai Sky Dome will create an airspace infrastructure for unmanned aerial vehicles (UAVs) that could connect buildings through "runways and miniature airports across the city".

"Drone systems represent one of the most promising emerging technologies in the civil aviation and transport sector," said Sheikh Ahmed, also chief executive and founder of Emirates Airline.

An air traffic control system to manage the use of multiple UAVs would be named 'Dubai Shield'.

Officials said a series of measures would need to be in place to "address safety and security risks faced by the airspace due to drone activity".

Mohamed Abdullah Lengawi, head of the Dubai Sky Dome project team, said it "aims to tap into massive potential opportunities for drone systems".

"Global studies indicate that the drones transport systems market, which consists mainly of delivery of goods, transport of passengers and freight, surveying and imaging, holds considerable promise as an emerging sector."

Companies including Amazon, DHL and UPS have tested drones that can deliver packages in recent years as they look to cut down on traditional vehicle use.

Medical firms such as San Francisco-based Zipline has flown medicine delivery drones in Rwanda and Ghana for several years and in April asked US authorities for permission to operate domestic services as a result of the coronavirus pandemic.

The technology to collect a package and deliver it by air has existed for a number of years - but the lack of systems to manage multiple UAVs, especially over cities, has prevented the industry from picking up.

A surge in e-commerce and online shopping since the coronavirus outbreak has led to renewed interest in unmanned deliveries.

Dubai's government said a new law covers the use, circulation, registration, manufacturing, import, sale, and possession of drones.

It also sets out rules governing the use of airspace, including around airports and other restricted and dangerous areas.

E-commerce companies including Amazon have tested drone deliveries in recent years. Courtesy: Amazon
E-commerce companies including Amazon have tested drone deliveries in recent years. Courtesy: Amazon

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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